A letter of credit terms is a document that specifically lays out the terms of a letter of credit, a loan, or some other form of borrowed money. Its main objectives are to make everything that was implicit explicit, and record it in a document. These letters usually accompany a letter of credit.
Tips for writing a letter of credit terms
- Err on the side of caution: if you aren’t sure you should include a certain term, do it anyways. It is always better to have something written down than nothing at all
- It may be a good idea to write this while both parties are present. That way, it will be easier for everyone to agree on the terms.
Sample letter of credit terms
Marjorie J. Grove
3057 Frum Street
Nashville, TN 37201
Dear Mrs. Grove,
These are the following terms that accompany the letter of credit granted to Tangelo Exports on the date of November 3rd, 2009 in regards to transaction #456545.
To collect the letter of credit, Tangelo Exports must satisfy the following terms:
1) Tangelo Exports must make at least 3 attempted transactions to collect what money is owed to them from bank account# 4543675475
2) Tangelo Exports must contact, in writing, Rising Sun Import/export Company, notifying them of their intentions of collecting on the provided letter of credit.